India has always been an attractive destination for offshoring - reasons being availability of skilled manpower (English speaking workforce), strong business ties with US, etc. In addition the lower rupee value against the US dollar is one of the crucial factors that make India an ideal place for outsourcing.

But a sudden steep rise in the rupee value during early 2007 didn’t seem to go well with some industries including the outsourcing community. The value of the dollar incessantly went down and touched Rs. 39.25 in October 2007, before bouncing back to currently being around Rs. 43 - thus bringing a respite to the industry.

Due to the upswing of the rupee value business outsourcing enterprises’ bottomlines started eroding fast. The industry initially got edgy, but remained poised - thinking that currency fluctuation is an aberration. People from the industry are of the opinion that the Indian market is growing mature enough to bear the impact of the currency fluctuation.

There have been some cases where BPOs started looking for alternative viable offshore locations and a few also went ahead with some relocation plans. But, according to Anwer Bagdadi, senior VP and CTO of CFC India Services, such cases are sporadic and don’t reflect the general sentiments of the outsourcing community. He believes the rupee-dollar value fluctuation doesn’t have much impact on outsourcing the business overall and India will continue to be the favorable destination for outsourcing activities.
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